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📢 Portfolio update: My path to financial independence at 50!

In the last few months I have learned a lot - especially through the exchange here in the community. My portfolio has changed changed a lotLess individual shares, more ETFs, and a clear strategy for the coming years.

🔹 In the past my portfolio was heavily dividend stocks characterized, above all $AAPL (+0,26 %) and Swiss stocks with high dividends.

🔹 Today I am consciously focus on more diversificationbut with a focus on Swiss equitiesin which I have been 10 years invested and will continue to do so in the long term. The whole thing is supplemented by accumulating ETFsto minimize costs.

🔹 My current focus:

✅ Swiss blue chips:
$SLHN (+0,02 %) , $ZURN (+0,21 %) , $SREN (-0,09 %) , $HOLN (-0,41 %)

✅ Tech:
$AAPL (+0,26 %) & $TSLA (-4,32 %) as strong individual values

✅ ETFs: iShares MSCI World, S&P 500 for global diversification

✅ Commodities & crypto: Gold (iShares Gold ETF) and a small Bitcoin holding

2nd and 3a pillar (95% invested in equities) as a long-term hedge (these gains are not 100% in the portfolio)

My goal is to live 50 to live largely from the dividendsmy expenses are deliberately very low should remain very low. Until then, I will not be switching my strategy to distributing ETFs, but will continue to rely on accumulating ETFsto take full advantage of the compound interest effect and optimize the tax burden.

💡 Thanks to the community, I was able to develop my strategy further - thank you for your inspiration, tips & helpful contributions! 🙌

➡️ How do you handle the issue of accumulating vs. distributing ETFs? When do you think is the best time to switch? 🤔

20Puestos

964.179,72 CHF

23,62 %

41 Comentarios

Fabian F.@Fabianfeuer

First of all, congratulations on the €1 million - that's not exactly common. Then why do you need a msci world and an acwi? You have quite a bit of overlap there

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SwissWealthBuilder@SwissWealthBuilder

@Fabianfeuer Thank you! Not quite 1 million yet, but I think I'll make it this year 🙌

On the subject of MSCI World & ACWI: I'm aware of the overlap, but it's developed that way:
I originally saved in one, but later preferred the other. Selling and reallocating doesn't make sense for me at the moment, as it would involve unnecessary transaction costs. MSCI World as a basis, ACWI for a little more emerging markets, without having to buy a separate EM ETF.
I realize that a simplification would be possible

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Julian@MoneyISnotREAL

@SwissWealthBuilder Depending on your tax situation in Switzerland.

In Germany, it makes sense to save in a second world ETF after a longer period of time (avoiding the FiFo principle).

Background:
The ETF that has been saved in for the shortest time (will generally have the lowest profit) has the lowest tax burden, i.e. this is the first to be saved in the retirement phase.
Then the second youngest and so on.
As a result, the oldest ETF with the highest price gain continues to generate returns with assets that have not been paid in (compound interest effect).

I myself have a $VWRL and have been saving in the $HMWO for some time. The overlaps don't matter, because whether I have e.g. 2x 10000 € or 1x 20000 € makes a marginal difference in the overall composition (due to the ETF composition with/without EMs).

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Alpalaka@Alpalaka

@MoneyISnotREAL This could also be avoided with a custody account transfer :)

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Gernhard@Gernhard_Reinholzen

@Alpalaka How so? The cost price should also be transferred.

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Alpalaka@Alpalaka

@Gernhard_Reinholzen
Whether I now put 1/2 of my investment amount into a new ETF or transfer 1/2 and sell the other half (fifo when transferring a custody account) does not matter in my opinion.

Of course, the method described above also works and is the easiest for sums >> €100,000 :)

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Gernhard@Gernhard_Reinholzen

@Alpalaka As far as I know, the average cost price should be transmitted for the transfer. There would therefore be no advantage to this procedure.

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Alpalaka@Alpalaka

@Gernhard_Reinholzen Nope, they also trade according to fifo

https://www.google.com/search?client=firefox-b-d&q=depot%C3%BCbertrag+fifo

I once had contact with ING on this: The purchase prices/purchase times are also taken over for securities account transfers

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Gernhard@Gernhard_Reinholzen

@Alpalaka Thank you. Learned something new again 👍.

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SwissWealthBuilder@SwissWealthBuilder

@MoneyISnotREAL In Switzerland, fortunately - and hopefully for a long time to come - we don't have to pay tax on share profits, only on dividends.

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Julian@MoneyISnotREAL

@Alpalaka Also a possibility. There are various ways.
Whether and how you do it is up to you.

Thanks for your comment 👌

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GargaGamble@gargi

Congratulations on your portfolio! Looks handsome indeed.

Two questions from my side: how old are you, and how did you get to this level of wealth?

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SwissWealthBuilder@SwissWealthBuilder

@gargi Thanks :-) I am almost 41 years old. I started saving early. For a long time, I lived with my parents, which allowed me to keep my housing costs low. Later, I moved into a shared apartment, also with low expenses. I always made sure to earn more than I spent, and everything I didn’t need, I saved. Eventually, I started investing my savings. I never had an exceptionally high income, but by living frugally, I was able to steadily build my wealth.

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GargaGamble@gargi

@SwissWealthBuilder Thanks for your honest answer. Wish you all the best in your investment journey! 🙏

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Brokémon@Brokemon

Very respectable portfolio! Why did you switch from the MSCI World to the ACWI or vice versa?

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SwissWealthBuilder@SwissWealthBuilder

@Brokemon Thank you! 😊 The change wasn't actually planned, it just happened over time:

At first I saved in the MSCI World because it offers a solid basis with a focus on industrialized countries. I later opted for the ACWI to also cover emerging markets without having to buy a separate EM ETF.
It makes no sense for me to sell and switch, as I can avoid unnecessary transaction costs and possible tax consequences.

Ultimately, I now have both in my portfolio, which suits me.

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Xander13@Xander13

What is Call Basket in your portfolio?

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SwissWealthBuilder@SwissWealthBuilder

@Xander13 Unfortunately, the call basket is not displayed correctly here, and it is not synchronized correctly at Swissquote either.

It is a structured product, more precisely a Multi Barrier Reverse Convertible with Nestlé, Novartis and Sika as underlyings.

Briefly explained: This product offers a fixed return of 8.20 % per year as long as none of the shares falls below a certain barrier. If the barrier is not breached, there is a full repayment plus the agreed interest. If one of the shares falls below the barrier and does not recover by the end of the term, the repayment can be made in the form of the corresponding share instead of in cash.

I use it as an addition to my portfolio because it offers an attractive return as long as the risk remains within limits.

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Xander13@Xander13

17H

@SwissWealthBuilder danke

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Kevin E.@KevinE

Not that I wouldn't consider a certain amount of diversification to be sensible. But if you had invested exclusively in Apple as you did "back in the day" and stuck with it, you would have a significantly higher performance today (Apple up ~900% since 2015).

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SwissWealthBuilder@SwissWealthBuilder

@KevinE That is absolutely correct. If I had left all my capital in Apple since 2015, the performance today would be significantly higher. But hindsight is always wiser.

I was able to realize very good profits with Apple, but I had the feeling that the momentum had slowed down since last year. I therefore made a conscious decision to take profits and diversify my portfolio by investing more heavily in ETFs.

My aim was to reduce risk and pursue a more sustainable, long-term strategy. Even though Apple has performed exceptionally well in the past, it remains a single company that is exposed to market fluctuations and company-specific risks. The broader diversification makes me feel more comfortable overall and less dependent on the performance of individual stocks.

In retrospect, a stronger position in Apple would certainly have been more lucrative, but with my current structure I can invest more relaxed in the long term.
How do you handle this - do you focus on concentrated individual stocks?

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Kevin E.@KevinE

@SwissWealthBuilder no, my largest single position (Broadcom) is just under 10%, not including the ETF shares.

I can understand the diversification, a certain amount of risk hedging is not wrong.

I'm a little lower in the portfolio myself, but my FI number is probably also lower because I live in Germany. Basically, I like the portfolio. I myself am only invested in Helvetia stocks via a Swiss ETF - unfortunately, individual shares are only possible via detours. I use it as a stable anchor for my portfolio.

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SwissWealthBuilder@SwissWealthBuilder

@KevinE May I ask what your FI number is and how old you are?

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Kevin E.@KevinE

@SwissWealthBuilder I'm 34 and my current goal is ~1.2 million, so I would consider myself FI. However, I'm not planning to stop working completely at the moment. I would then try to reduce it bit by bit. But let's see, there are definitely still a few years to go 💁‍♂️

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SwissWealthBuilder@SwissWealthBuilder

@KevinE I don't want to stop working completely either, I love my job too much for that.
Cool! Then good luck for the future!

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Founder@Cyprus-Founder

@SwissWealthBuilder , as a fellow portfolio holder >1 Mio€ I would say you do not need to think of switching from acc. to distr. ETFs.. At least not from cost perspective. I know Swiss brokers are far more expensive than German low cost brokers, but how often will you sell shares to life of them? Like once or twice a year i assume. So should not make much of a difference. Also broker cost will rather decrease over time even further.

If you want to live off your portfolio, what is the safe-withdraw-rate you are calculating with?

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SwissWealthBuilder@SwissWealthBuilder

@Cyprus-Founder You're absolutely right. From a cost perspective, switching from accumulating to distributing ETFs is not really necessary. Since I don’t plan to sell shares frequently, transaction costs should not be a major concern.

Regarding my plan to live off my portfolio, here’s my rough calculation:

My goal is to have around 1.5 million CHF invested by age 50.
Assuming an average return of 6%, this would generate around 90k CHF per year.
However, I won’t completely stop working, as I love my job. I expect to continue earning around 40k CHF per year.
That means I would need around 50k CHF from my portfolio to cover my expenses.
With this in mind, my Safe Withdrawal Rate (SWR) is approximately 3.33% (50k CHF withdrawal from 1.5M CHF). This is well within the commonly used 4% rule, ensuring that my investments remain sustainable in the long run.
I plan to generate part of this amount through dividends and distributions, reducing the need to sell assets.
From age 65, my pension should provide an additional 50k CHF per year, further securing my financial situation.
That’s my general plan, and I feel comfortable with this approach. How do you approach your withdrawal strategy?

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Founder@Cyprus-Founder

@SwissWealthBuilder , that sounds pretty solid!
4% is a rule of thumb and from what I have seen, rather to high. Check out this video: https://www.youtube.com/watch?v=1FwgCRIS0Wg
( By the way, Ben has, in my humble opinion, the best passive investing youtube channel out there!)
Around 2,7% should be more realistic, however with your job on the side, and maybe the willingness to adjust spendings in critical years you might get away with the 3,33%.

I currently have around 4,5-5,3 Million in assets. So I calculate with 2,5% which is already more than enough to life a comfortable life anywhere in the word. Have not planned to stop working either :)

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P.@growth_ninja_kixmn

May I take this opportunity to ask an uninformed question? What is the advantage of saving pillar 3 with this portfolio?

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SwissWealthBuilder@SwissWealthBuilder

@growth_ninja_kixmn Sure, good question. For me, pillar 3a mainly has tax advantages.

The deposits can be deducted from my taxable income, which means I pay less tax every year.

As long as the money is in pillar 3a, there is no capital gains tax, which is particularly advantageous for long-term investments.

In addition to my normal portfolio, pillar 3a offers an additional investment structure that is tax-privileged.

As I am building up assets early on and my goal is to live off the income when I am 50, pillar 3a fits well into my concept as a supplement.

It's worthwhile for me because I can save taxes now and invest for the long term at the same time.

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P.@growth_ninja_kixmn

@SwissWealthBuilder Thanks for the answer! Capital gains tax would only apply (in Switzerland, for non-professional private investors) to dividends, interest and accumulated income, not to capital gains from ordinary share trading, but depending on the portfolio, the tax advantage is worthwhile even with lower returns from pillar 3 ? Did I understand that correctly?

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SwissWealthBuilder@SwissWealthBuilder

@growth_ninja_kixmnJaIn Switzerland, capital gains from the sale of shares are generally not subject to tax for private investors as long as there is no commercial trading. Capital gains tax only applies to dividends and interest. Accumulating income is also not subject to tax as long as it is not distributed.

Payments into pillar 3a can reduce your taxable income. For example, if you earn CHF 80,000 and pay in the current maximum amount of CHF 7,258, the tax is only calculated on income of CHF 72,742.

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Epi@Epi

@SwissWealthBuilder I would like to see something like that in Germany!
Instead, there are discussions about levying health insurance and social security contributions on all capital gains in addition to taxes. This is supposed to solve the treasury problem... 🤨

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DEEPfuckingBTC@DEEPfuckingBTC

Very cool! 🍾🥂 Which pillar 3a product do you have?

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SwissWealthBuilder@SwissWealthBuilder

@DEEPfuckingBTC Hello :-) I use frankly with Extreme 95.

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DEEPfuckingBTC@DEEPfuckingBTC

Very cool 🤩 (me too)

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Epi@Epi

Why an expensive switch to distributing? Isn't it enough to simply remove the positions?

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Kevin@DonRacletto

awesome, I hope my portfolio will look like this when I'm 41 :D That's how I imagine financial independence at 50, but I treat myself to something nice every now and then on the way there ;) Pillar 3a now makes up a large part of my portfolio. Good luck on your journey and thanks for sharing!

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NicoTrinchese@NicoTrinchese

22H

Absolutely stunning! Thanks for sharing. You are a true inspiration

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LordSnoopy@LordSnoopy

16H

How old are you?

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